EUR rose against its major rivals in the European session on Friday, as the reports about the progress on legislation necessary to roll out the EU rescue package continued to support the single currency.

On Thursday, the European Parliament and the European Commission (EC) reached an agreement on a mechanism that enables the EU to suspend/cut EU funds if a member state breaches the rule of law. This is an important step on the road to releasing a EUR1.8 trillion coronavirus recovery package. Under the new proposal, the EC will get powers to identify breaches of the EU rules and values and to propose a suspension or reduction of budget handouts. The decision on sanctions would require the approval of a qualified majority of EU member states. The new agreement still needs to be approved by a majority of the EU governments before it can be implemented into the bloc’s rules.

However, the further growth of the euro is restricted by growing coronavirus infections in Europe and worries about the economic impact of re-imposed lockdown measures.

Investors digested disappointing data out of Germany, which showed that the country’s industrial output rose by less than forecast in September as a resurgence of the coronavirus began to weigh on a recovery in business activity. According to Destatis, Germany's industrial output grew by 1.6 percent m-o-m in September following a revised 0.5 percent m-o-m rise in August.  but slower than economists' forecast of 2.7 percent.